Right now, we have two stocks trading around $0.50 that are gaining momentum and that we believe are on their way to $1. Fueled by insider buying, company buybacks, low valuations and the current thawing of the micro-cap universe, the only question we see now is: which stock “runs to one” first?
The GeoTeam specializes in micro-cap research, which is generally centered on companies with market caps of $50 to $300 million. While focusing on stocks that trade over $1.00 has been our bread and butter for years, we also look at some nano-caps that trade under $1.00 to try to identify the next potential multi-bagger.
So now we ask — who “runs to one” first — Seychelle Environmental (OOTC:SYEV) or Repro Med Systems (OOTC:REPR)? Vote at the end of this research.
Seychelle: A Water Filtration Company
- On July 13, 2015, we stated that we initiated a small speculative position as the stock was breaking out of a flat line chart pattern and nearing its 52 week high of $0.45, coupled with strong Q1 2016 results. After further due diligence, on July 16th, we added to our long position stating if the company can maintain its Q1 2016 EPS level over the next several quarters we felt shares could eclipse $1.00 (P/E of 15 on EPS run rate of $0.08).
- To see all updates on company, click here.
The GeoTeam has gained more confidence that Seychelle, a company that has over promised and under-delivered in the past and seems to finally be on track with executing its strategy to consistently grow sales and earnings. Just weeks ago, SYEV filed its second quarter 2016 10-Q and the company reported a blowout quarter posting:
- Sales of $2.7 million vs $767 thousand
- EPS of $0.02 vs $0.00
- Guides for Q3 2016 revenues of $2.8 million to $3.0 million
Sales have been getting a boost from 3 phases:
- New product line – “the launch of our pH2O product line, which increases the alkalinity of municipal water to between 8.0-9.5 pH. Sales during the three months ended August 31, 2015 of this product line were approximately $866,000, compared to zero in the comparable period of 2014.”
- Private label pitcher and bottle – “significantly increased its distribution line, with sales increasing from $60,000 during the three months ended August 31, 2014 to $643,000 during the three months ended August 31, 2015.”
- Other core products – The hire of a national sales manager in Q2 2014 has increased the customer base and expanded distribution channels lifting overall sales in many product lines. Sales from other core products were ~$1.2 million vs $700 thousand in the prior year.
Repro-Med: Dominating the Home Infusion Pump Niche
- We first disclosed our long position on 6/13/2013 at $0.26
- On October 7th, we wrote our flagship article on REPR, talking about the company’s focus on the home-care market.
- To see all Geo updates on this company, click here.
Repro-Med is a company that GeoInvesting has been following for years. We’ve written extensively on REPR, arguing that the company’s grasp on the home infusion pump business could eventually lead to large gains for shareholders based on fundamentals or a potential buyout. Repro-Med, like Seychelle, also reported strong growth for its Q2 2016. In addition, the company announced a share buyback program.
- Sales of $3.17 million vs $2.50 million in the prior year
- EPS of $0.01 vs $0.00 in the prior year
Here’s some bullish quotes from management:
- “We are seeing continued growth in all sectors of the infusion market both domestically and internationally, especially in home administration”
- “Company’s decision to initiate the stock repurchase program is based upon its belief that “the current market price of the common stock is below its intrinsic value when considering the Company’s recent performance, ongoing profitability and significant growth prospects. The Board and management are confident that Repro Med Systems has sufficient capital to fund its anticipated growth and therefore believe that repurchases at this time are in the best interest of the Company and its shareholders.”
Which Will Run to One First?
We want you to invest interactively with us here. Take a second and let us know which of these two companies could be the first to “run to one”, and perhaps one that you feel is your own winning idea.
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Remember, at Geo, our ultimate goal is to educate while at the same time building a community of investors that collaborate with each other to find great investment opportunities. Some of our best ideas have come from our subscribers. We continue to believe the best is yet to come.